Investing.com - Asian shares gained on Wednesday as markets shrugged off the potential impact on economic policy plans by President Donald Trump who faced a blowback after he fired FBI Director James Comey over alleged poor handling on politically sensitive investigations.
Japan's Nikkei 225 index rose 0.45%, and South Korea's Kospi gained 0.24%.
The S&P/ASX 200 rose 0.34%, reversing earlier losses as investors in digested the release of the federal budget released yesterday after the market close. Shares of major Australian banks fell more than 1 percent in early trade following the news of a levy on banks in the budget. Commonwealth Bank fell 0.6% and National Australia Bank dipped 0.48%.
Markets in greater China were also in the green, with Hong Kong's Hang Seng Index up 0.42% and the Shanghai Composite rose slightly. China reported consumer prices for April rose 1.2%, more than the 1.1% gain seen year-on-year and producer prices gained 6.4%, less than the expected 6.9% rise.
Markets in Singapore, Thailand and Malaysia were closed for the Vesak Day public holiday.
Overnight, U.S. stocks closed mostly lower on Tuesday, after Federal Reserve officials signalled the possibility of faster rate hikes while geopolitical tensions over North Korea returned.
Risk-on sentiment eased, as investors mulled over hawkish comments from Kansas City Fed President Esther George on Tuesday while North Korean ambassador to the UK said the country will proceed with its sixth nuclear test.
Fed member George said that the U.S. central bank should keep gradually raising short-term interest rates despite the recent slowdown in GDP and car sales.
Meanwhile, Boston Fed President Eric Rosengren warned, that faster interest rate hikes would be needed should unemployment continue to drop below the level of “natural employment” and cause the economy to overheat.
Investors expectations for a June rate hike soared to the highest level, pushing U.S. treasury yields to a five-week high. The U.S. 10-Year hit a five-week high of 2.409, up 1.37%.
According to investing.com’s Fed rate monitor tool, 80% of traders expect the Federal Reserve to hike interest rates in June, compared to 63% in the previous week.
The Dow Jones Industrial Average at 20,975.78, down 0.17%. The S&P 500 fell 0.10% while the Nasdaq Composite closed higher at 61520.59, up 0.29%.